A new survey shows one in three people borrow money to pay their bills and the same number are ashamed or embarrassed about their financial situation.
The survey of 1,000 people across Australia by not-for-profit Good Shepherd Microfinance showed that overwhelmingly people turn to family to help them through financial tough times, with five per cent borrowing money for household bills and essentials every month.
Good Shepherd Microfinance CEO Peter McNamara said nearly half of respondents had also loaned money to a friend or relative over the past year.
“People are most likely to tell family if they’re in financial strife but one in three stays silent,” Mr McNamara said.
“It is heartbreaking that so many people feel ashamed or embarrassed about their finances. If you’ve never had to scrimp and save, you may not know how demoralising it can feel.”
Another 18 per cent told the survey that the hardest part about financial stress was feeling left out because everyone else seemed to be coping.
“Clearly, we need a more open, honest national conversation about our cost of living challenges and what we can do to fix economic inequality,” Mr McNamara said.
The survey revealed that family were most often asked to tide people over, with 61 per cent most likely to ask a relative for a loan, 18 per cent asking a friend, nine per cent applying to a bank, eight per cent applying for a fast cash loan and one per cent seeking a no interest loan.
“No interest loans are the best and cheapest way for people on low incomes to cover household expenses and necessities,” Mr McNamara said.
“With our No Interest Loan Scheme (NILS), you only repay what you borrow, so you don’t get caught in a cycle of borrowing and debt.”
Most survey respondents (62 per cent) said borrowing money from family had been a good experience, however a quarter of respondents said it was eye-opening or a disaster.
“You don’t want close relationships and friendships ruined by a bad experience with money.
There are safe, fair and affordable alternatives,” Mr McNamara said.
To apply for a no interest loan, visit nils.com.au to find your nearest provider.